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Kazakhstan oil and gas sector says renewables will have to wait

Kazakhstan’s oil and gas industry said the country will have to wait until alternative sources of energy become competitive economically before the energy industry seriously considers it.

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In a statement from Kazenergy, an association of oil, gas and energy organizations and companies in Kazakhstan, the group said it was ruling out the adoption of alternative energy methods for now, quoting its chairman Timur A. Kulibayev in a press release.

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"It's very fashionable these days to talk about alternative energy," Mr. Kulibayev was quoted as saying. "We would look for alternative energy once its cost of production becomes lower and feasible."

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Mr. Kulibayev said they will wait until the alternative energy sector becomes “more financially affordable” before developing the country’s renewable energy resources.

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Kazenergy has not been quiet about its views on greenhouse gas emissions. Back in June, the group issued a statement urging the national government to adjust the basis for its allocation of emission quotas for 2013, which was set at 2010.

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"If we limit ourselves within the framework of 2010 indicators, the implementation of many other large projects will be under the threat of failure,” the association then said.

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According to the obligations of membership in Kyoto Protocol, Kazakhstan is obliged under the Kyoto Protocol to reduce greenhouse gas emissions from a 1992 baseline by 15 percent till 2020, and by 25 percent till 2050.

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Currently, the country is aiming to meet 10 percent of its energy demand through alternative energy.

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Kazenergy itself admits that the country’s topography and terrain is perfect to become a major producer of wind and solar energy. “It not only has gorges acting as wind tunnels but the southeast part of country also gets over 300 sunny days in a year,” it said in the statement.

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But for now, the group is prioritizing the development of the oil, gas and coal sectors. The recent statement itself was projected to be a boon for foreign investors lining up to put money on the traditional energy sectors.

“Kazakhstan's 80 percent of power generation is generated by coal. The nation is home to one of the largest coal reserves the world. The second largest oil producer [among the former Soviet states] after Russia is looking at immediate financial goals than long term environment goals.”

But Kazakhstan’s Minister of Environment Protection Nurlan Kapparov, during the Rio+20 summit, said the country has enormous potential for energy saving and developing renewable sources.

“Kazakhstan believes that there is no alternative to a green economy. Economic development is a priority for all countries, but it must not destroy the ecosystem and undermine the natural basis of life on Earth. We must take all measures we can to create the conditions needed to pursue a model of sustainable development at all levels,” the minister said.

To date, alternative sources in Kazakhstan remain untapped and underdeveloped, accounting for only 1 percent of the country’s energy balance, according to the United Nations.

“Immense opportunities exist in central Asia, and particularly in Kazakhstan, that can help address energy and climate issues,” said Kandeh Yumkella, director general of the U.N. Industrial Development Organization. – Catherine Dominguez



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